Components of CBIS
(Computer Based Information System)
TPS: Transaction Processing Systems
Definition: A Transaction Processing System (TPS) is a type of information system that
collects, stores, modifies and retrieves the data transactions of an enterprise.
A transaction is any event that passes the ACID test in which data is generated or
modified before storage in an information system
Features of Transaction Processing Systems
The success of commercial enterprises depends on the reliable processing of transactions
to ensure that customer orders are met on time, and that partners and suppliers are paid
and can make payment. The field of transaction processing, therefore, has become a vital
part of effective business management, led by such organisations as the Association for
Work Process Improvement.
Transaction processing systems offer enterprises the means to rapidly process
transactions to ensure the smooth flow of data and the progression of processes
throughout the enterprise. Typically, a TPS will exhibit the following characteristics:
Rapid Processing
The rapid processing of transactions is vital to the success of any enterprise – now more
than ever, in the face of advancing technology and customer demand for immediate
action. TPS systems are designed to process transactions virtually instantly to ensure
that customer data is available to the processes that require it.
Reliability
Similarly, customers will not tolerate mistakes. TPS systems must be designed to ensure
that not only do transactions never slip past the net, but that the systems themselves
remain operational permanently. TPS systems are therefore designed to incorporate
comprehensive safeguards and disaster recovery systems. These measures keep the
failure rate well within tolerance levels.
Standardization
Transactions must be processed in the same way each time to maximise efficiency. To
ensure this, TPS interfaces are designed to acquire identical data for each transaction,
regardless of the customer.
Controlled Access
Since TPS systems can be such a powerful business tool, access must be restricted to
only those employees who require their use. Restricted access to the system ensures that
employees who lack the skills and ability to control it cannot influence the transaction
process.
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Transactions Processing Qualifiers
In order to qualify as a TPS, transactions made by the system must pass the ACID test.
The ACID tests refers to the following four prerequisites:
Atomicity
Atomicity means that a transaction is either completed in full or not at all. For example, if
funds are transferred from one account to another, this only counts as a bone fide
transaction if both the withdrawal and deposit take place. If one account is debited and
the other is not credited, it does not qualify as a transaction. TPS systems ensure that
transactions take place in their entirety.
Consistency
TPS systems exist within a set of operating rules (or integrity constraints). If an integrity
constraint states that all transactions in a database must have a positive value, any
transaction with a negative value would be refused.
Isolation
Transactions must appear to take place in isolation. For example, when a fund transfer is
made between two accounts the debiting of one and the crediting of another must appear
to take place simultaneously. The funds cannot be credited to an account before they are
debited from another.
Durability
Once transactions are completed they cannot be undone. To ensure that this is the case
even if the TPS suffers failure, a log will be created to document all completed
transactions.
These four conditions ensure that TPS systems carry out their transactions in a
methodical, standardised and reliable manner.
Types of Transactions
While the transaction process must be standardised to maximise efficiency, every
enterprise requires a tailored transaction process that aligns with its business strategies
and processes. For this reason, there are two broad types of transaction:
Batch Processing:
Batch processing is a resource-saving transaction type that stores data for processing at
pre-defined times. Batch processing is useful for enterprises that need to process large
amounts of data using limited resources.
Examples of batch processing include credit card transactions, for which the transactions
are processed monthly rather than in real time. Credit card transactions need only be
processed once a month in order to produce a statement for the customer, so batch
processing saves IT resources from having to process each transaction individually.
Real Time Processing
In many circumstances the primary factor is speed. For example, when a bank customer
withdraws a sum of money from his or her account it is vital that the transaction be
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processed and the account balance updated as soon as possible, allowing both the bank
and customer to keep track of funds.
MIS: Management Information System
Definition: Management Information Systems (MIS) is the term given to the discipline
focused on the integration of computer systems with the aims and objectives on an
organization.
The development and management of information technology tools assists executives
and the general workforce in performing any tasks related to the processing of
information. MIS and business systems are especially useful in the collation of business
data and the production of reports to be used as tools for decision making.
Applications of MIS:
With computers being as ubiquitous as they are today, there's hardly any large business
that does not rely extensively on their IT systems.
However, there are several specific fields in which MIS has become invaluable.
Strategy Support
While computers cannot create business strategies by themselves they can assist
management in understanding the effects of their strategies, and help enable effective
decision-making.
MIS systems can be used to transform data into information useful for decision making.
Computers can provide financial statements and performance reports to assist in the
planning, monitoring and implementation of strategy.
MIS systems provide a valuable function in that they can collate into coherent reports
unmanageable volumes of data that would otherwise be broadly useless to decision
makers. By studying these reports decision-makers can identify patterns and trends that
would have remained unseen if the raw data were consulted manually.
MIS systems can also use these raw data to run simulations – hypothetical scenarios that
answer a range of ‘what if’ questions regarding alterations in strategy. For instance, MIS
systems can provide predictions about the effect on sales that an alteration in price would
have on a product. These Decision Support Systems (DSS) enable more informed
decision making within an enterprise than would be possible without MIS systems.
Data Processing
Not only do MIS systems allow for the collation of vast amounts of business data, but
they also provide a valuable time saving benefit to the workforce. Where in the past
business information had to be manually processed for filing and analysis it can now be
entered quickly and easily onto a computer by a data processor, allowing for faster
decision making and quicker reflexes for the enterprise as a whole.
Management by Objectives
While MIS systems are extremely useful in generating statistical reports and data
analysis they can also be of use as a Management by Objectives (MBO) tool.
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MBO is a management process by which managers and subordinates agree upon a series
of objectives for the subordinate to attempt to achieve within a set time frame.
Objectives are set using the SMART ratio: that is, objectives should be Specific,
Measurable, Agreed, Realistic and Time-Specific.
Benefits of MIS
The field of MIS can deliver a great many benefits to enterprises in every industry. Expert
organisations such as the Institute of MIS along with peer reviewed journals such as MIS
Quarterly continue to find and report new ways to use MIS to achieve business
objectives.
Core Competencies
Every market leading enterprise will have at least one core competency – that is, a
function they perform better than their competition. By building an exceptional
management information system into the enterprise it is possible to push out ahead of
the competition. MIS systems provide the tools necessary to gain a better understanding
of the market as well as a better understanding of the enterprise itself.
Enhance Supply Chain Management
Improved reporting of business processes leads inevitably to a more streamlined
production process. With better information on the production process produces the
ability to improve the management of the supply chain, including everything from the
sourcing of materials to the manufacturing and distribution of the finished product.
Quick Reflexes
As a corollary to improved supply chain management comes an improved ability to react
to changes in the market. Better MIS systems enable an enterprise to react more quickly
to their environment, enabling them to push out ahead of the competition and produce a
better service and a larger piece of the pie.
DSS: Decision Support Systems
Definition: A Decision Support System (DSS) is an umbrella term used to describe any
computer application that enhances the user’s ability to make decisions. More specifically,
the term is usually used to describe a computer-based system designed to help decision-
makers use data, knowledge and communications technology to identify problems and
make decisions to solve those problems.
Types of DSS
Since the definition of Decision Support Systems can be stretched to include almost any
application that processes data there is some confusion as to exactly what constitutes a
DSS. In an effort to clarify the term, DS systems can be separated into seven broad
categories, each aiding decision making by different methods.
Communications Driven DSS
A C-D DSS is a type of DSS that enhances decision-making by enabling communication
and sharing of information between groups of people. At its most basic level a C-D DSS
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could be a simple threaded e-mail. At its most complex it could be a web-conferencing
application or interactive video.
Communication-Driven DSS will exhibit at least one of the following characteristics:
• Supports coordination and collaboration between two or more people;
• Facilitates information sharing;
• Enables communication between groups of people;
• Supports group decisions.
Data-Driven DSS
Data-driven DSS are a form of support system that focuses on the provision of internal
(and sometimes external) data to aid decision making. Most often this will come in the
form of a data warehouse – a database designed to store data in such a way as to allow
for its querying and analysis by users.
Another example of a data-driven DSS would be a Geographic Information System (GIS),
which can be used to visually represent geographically dependant data using maps.
Document-Driven DSS
Document-driven DSS are support systems designed to convert documents into valuable
business data. While data-driven DSS rely on data that is already in a standardised
format that lends itself to database storage and analysis, document-driven DSS makes
use of data that cannot easily be standardised and stored.
Knowledge-Driven DSS
Knowledge-driven DSS are systems designed to recommend actions to users. Typically,
knowledge-driven systems are designed to sift through large volumes of data, identify
hidden patterns in that data and present recommendations based on those patterns.
Model-Driven DSS
Model-driven support systems incorporate the ability to manipulate data to generate
statistical and financial reports, as well as simulation models, to aid decision-makers.
Model-based decision support systems can be extremely useful in forecasting the effects
of changes in business processes, as they can use past data to answer complex ‘what-if’
questions for decision makers.
In addition to these basic types of DSS there are also two additional factors: whether the
DSS is spreadsheet-based, web-based or something else entirely.
Scope of DSS
DSS uses TPS and MIS to get the internal information to make any decision. Even it can
bring information from external sources like stock exchange, specific websites etc. DSS
use sophisticated analysis and modeling tool. DSS provides support for decisions and
problems that cannot be specified in advance.
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EIS: Executive Information System
Definition: An EIS (Executive support system) is a computer-based system that serves
the information needs to top executives. It provides rapid access to timely information
and direct access to management reports. EIS is very user-friendly, supported by
graphics, and provides exceptions reporting and “ drill-down” capabilities. It is easily
connected with online information services and electronic mail.
An Executive Information System (EIS) allows senior management and other staff to
access a wide range of summarised data electronically. It is generally a stand-alone
system but may use data automatically extracted from a data warehouse. Its most
important design features are ease of use and visual impact. It should be intuitive so that
managers can use it with little or no training. Many of these systems will have drill-down
and slice and dice capabilities similar to more comprehensive decision support systems
(DSS) designed for planning and other administrative staff. While a DSS may trade-off
some ease of use for increased functionality it is important that this is not the case with
an EIS. An EIS has to be extremely easy to use and will probably have to be tailor-made
for the purpose.
Characteristics of EIS
An EIS has many distinct characteristics that differentiate it from other applications
software. A list of these features is presented in table below. A successful executive
information system minimizes hard copy reports while keeping high-level executives up
dated. With an EIS, qualitative information is obtained without producing volumes of
paper.
Advanced internal control and communication are typical focuses of an EIS. The ability to
view exception reporting on the computer screen is an example of an EIS-facilitated
management control technique. Most executive information systems highlight the areas
of the business that are going astray. Color codes are used to display data that are in an
acceptable or unacceptable range as defined by the executive. This technique allows the
computer to track important project assignments within a company using the executive
information system. An EIS allows access to external as well as company internal
information.
Characteristics Description
Degree of use High, consistent, without need of technical
assistance
Computer skills required Very low --must be easy to learn and use
Flexibility High -- must fit executive decision making style
Principle use Tracking, control
Decisions supported Upper level management, unstructured
Data supported Company internal and external
Output capabilities Text, tabular, graphical, trend toward audio/video
in future
Graphic concentration High, presentation style
Data access speed Must be high, fast response
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Advantages of an Executive Information System
Simple for high-level executives to use Operations do not require extensive computer
experience
Provides timely delivery of company summary information
Provides better understanding of information
Filters data for better time management
Provides system for improved information tracking
Disadvantages of an Executive Information System:
Computer skills required to obtain results
Requires preparation and analysis time to get desired information
Detail orientedProvides detailed analysis of a situation
Difficult to quantify benefits of DSSHow do you quantify a better decision?
Difficult to maintain database integrity
Provides only moderate support of external data and graphics capabilities
Factors influencing the functioning of Executive information systems:
Organizational setup
The policies and procedures followed in an organization have a great impact in the
manner management information systems are implemented in an organization. For e.g. If
a company believes in centralization of authority and hesitates to delegate authority then
EIS will be provided for the top most managers in the organization. On the contrary if the
company is of the opinion that decentralization of authority will help in better governance
then EIS will be introduced in a separate manner. They will be given to a couple of
managers even at the junior level if it is believed that it will aid them in one way or the
other.
Other factors
The internal and external factors connected directly or indirectly with the organization will
have their own say in establishing executive information systems in an organization. For
e.g. if matters relating to compliance of tax, audit and other statutory matters are
handled by the senior mangers only then EIS will be targeted to them alone. On the other
hand if clerical labor is also involved in the same procedures EIS they will also be able to
access EIS and render the necessary supporting functions to the senior managers.
Whatever be the case the role of men in an organization plays a crucial part in
implementation and functioning of executive information systems.
Conclusion
The success of executive information systems lies in two issues. Firstly the information
should properly reach the concerned executives. Secondly they should accord importance
and act upon it. Above all whatever they say must be given due consideration by the
decision making authority. The system must be a fool proof one. Only then the results
will reveal the true picture.
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ES: Expert Systems
Powerful decision-making tools, DSSs and – EIS only include quantitative formulae, or
models, that process data. Often however, managers or other workers may need
expertise to make certain decisions, not just formulae. In the past, only human experts in
a specific line of work could provide advice to decision makers. Now, ISs can be
developed such that they incorporate human expertise. These systems are called expert
systems.
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